Long Term Disability Risks for Professional Athletes
It is no secret that serious and permanent injuries occur to professional and college athletes on an alarmingly regular basis. As an Long-Term Disability (LTD) insurance lawyer, a former high school and college athlete, a dedicated Ohio State and Cal football and basketball fan – and, as the Father of Brutus the Buckeye (I kid you not, check it out on Google), I have a VERY warm spot in my heart for disabled athletes. When these men and women suffer a career ending injury, they not only see the dreams to which they had devoted their lives come crashing down but, in many cases, their livelihood as well.
However, this is not totally unforeseen and most professional athletes may have a LTD policy to protect them in case such injuries occur. Unfortunately, most of these athletes and even their lawyers and agents, have never heard of ERISA Preemption. Like anyone with an employer sponsored LTD plan, most professional athletes have their disability insurance premiums – made out to Prudential or Mass Mutual, or MetLife, or Berkshire or Unum – paid by the Red Sox or Forty-Niners or Bruins or Lakers or Warriors. As a result, their LTD policies are little more than negotiating opportunities for insurance company claims managers or lawyers.
Unfortunately, most of these athletes will recover only thirty or forty cents on the benefits dollar if an injury should cause their careers to crumble around them. Only after it’s too late will they learn that because of ERISA Preemption, they have no right to a jury trial; no right to recover consequential or compensatory damages; and no right to sue for punitive damages. Therefore, they have no leverage to force their insurers to simply pay the benefits owed under their insurance contracts. Agents and financial advisors should beware of the policies governed by ERISA and should never allow their high-risk clients to obtain only an ERISA preempted policy.
Another scenario that is not uncommon is to have an athlete suffer an injury to the knee, neck, head, or brain that leaves them in a precarious position where they are still able to compete but at a greatly elevated risk of exacerbating the injury and causing severe lifelong repercussions. Just like anyone else, the athlete cannot be forced to play through the injury when the consequences can be so severe. An athlete at this point is already most likely disabled under the terms of an LTD insurance policy and need not suffer another injury that leaves him or her unable to function normally.
As with any profession, it is critical to make sure that the LTD plan provides the protection and security that lead the insured to buy the policy in the first place. Naturally, having a good LTD policy is even more important when your career will likely be short (as it is for most athletes) with the significant risk that injury will make it even shorter.